- EUR/USD bounces off year lows near 0.9800 as price action overextends.
- Sentiment remains negative, although it failed to support the USD.
- US jobless claims came in better than expected, while EU consumer confidence disappointed.
The EUR it is almost sideways after hitting a new all-time low at 0.9806 following the Fed’s interest rate decision in September. The central bank further confirmed an aggressive approach as most policymakers expect further increases in the fed funds rate; therefore, interest rate differentials between the EU and the US are a headwind for the EUR/USD.
EUR/USD started trading around daily lows and hit a daily high of 0.9907 before paring those gains and settling around the current price zone. At the time of writing, EUR/USD is trading at 0.9842, posting a minimal gain of 0.03%.
EUR/USD recovers some ground amid a weakening dollar
Global equities remain under pressure after Fed Chairman Powell and company hiked rates. The US Department of Labor reported that initial jobless claims for the week ending September 17 rose by 213,000 below an expected 217,000, outlining the “very tight” labor market, as put by the Chairman Powell at the press conference following the Fed’s decision on Wednesday.
Meanwhile, the US Dollar Index erased some of its earlier gains, dipping 0.09% to 111.347, a tailwind for EUR/USD. By contrast, 10-year US Treasury yields remain positive, rising to 3.682%, gaining 14 basis points, after hitting an 11-year high of around 3.71%.
Meanwhile, adding to an already deteriorating economic scenario in the Eurozone, EU Consumer Confidence in September slumped to -28.8, beating estimates of -25.0. Meanwhile, the member of the Governing Council of the ECB, Isabel Schnabel, commented that inflation is still too high, for which further rate hikes would be necessary. Although she did not acknowledge a recession in the Eurozone, she warned that it could be inevitable in Germany.
What to watch out for
The EU calendar will include the S&P global PMIs for Spain, France, Germany and the Eurozone. In the US, the S&P Global PMIs will also be released, along with Fed Chairman Jerome Powell’s speech at around 18:00 GMT.
EUR/USD Key Technical Levels
|Last Price Today||0.9844|
|Today’s Daily Change||0.0007|
|Today’s Daily Change %||0.07|
|Today’s Daily Opening||0.9837|
|20 Daily SMA||0.9985|
|50 Daily SMA||1.0091|
|100 Daily SMA||1.0299|
|200 Daily SMA||1.0711|
|Previous Daily High||0.9976|
|Previous Daily Minimum||0.9813|
|Previous Maximum Weekly||1.0198|
|Previous Weekly Minimum||0.9945|
|Monthly Prior Maximum||1.0369|
|Previous Monthly Minimum||0.9901|
|Daily Fibonacci 38.2%||0.9876|
|Daily Fibonacci 61.8%||0.9914|
|Daily Pivot Point S1||0.9775|
|Daily Pivot Point S2||0.9713|
|Daily Pivot Point S3||0.9612|
|Daily Pivot Point R1||0.9938|
|Daily Pivot Point R2||1.0039|
|Daily Pivot Point R3||1.0101|
Source: Fx Street
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